Govt must talk to stakeholders on Semen Gresik case

Govt must talk to stakeholders on Semen Gresik case
Published: 15 February 2005

The management of publicly listed state-owned cement producer Semen Gresik is caught in the middle of a fight between its major shareholders, the government and Cemex SA. The Jakarta Post interviewed Semen Gresik president director Satriyo last week about the company’s efforts in managing its operation amid the conflict.  

Question: How is the dispute between the government and Cemex affecting Semen Gresik operations?  
Answer: I am not denying the fact that the concentration of a human being in working on a certain task will be divided when he or she has to deal with another problem. That is exactly what the Semen Gresik management is dealing with right now; we cannot perform 100 per cent due to this dispute.  

Our concentration is now divided between trying to help the disputing parties solve their problem. We have to be ready to be called by the government at any time and prepare answers when there is question regarding the dispute.   We hope the dispute can be immediately settled based on good faith between the government and Cemex. I am optimistic that they can sit at the table and seek a win-and-win solution to the dispute. Anything in business is possible.  

What is the expectation of management over the dispute settlement?   The management is not directly involved in the negotiations for dispute settlement. We have only been asked by the government to supply supporting data and documents. However, negotiations should not only be based on economic matters, but also take into account local culture. There is a deep sense of ownership in the local community for Semen Gresik, since the company has intensively involved them in a number of community development programs.   The government should also take into account the character of Semen Gresik workers; Semen Gresik is a symbol of pride for all of its workers.

Do you mean that the government also needs to talk to the labor union, local community and administration for settling the dispute?   Whatever the solution is, the government should first discuss it with the labor union, local administration, local community figures and the surrounding community where Semen Gresik is operating.  

As for me, as part of the company’s board of directors, I will remain working as a professional. However, I have to admit that I cannot ignore the situation surrounding me. There are local legislators and clerics who want their voices heard by the central government.   Local people have long felt that they have been deceived by the central government. With such a stance, it is difficult for me to convince them with any solution proposed by the central government.  

Semen Gresik workers are indeed professional as the company managed to pass its production target last year, despite concerns that we may not be able to achieve it due to a number of problems.  Because of our hard work, and this is acknowledged by Cemex officials, we managed to increase our production to over seven million tons last year, far above our installed capacity of 6.9Mt

It is the first time in Semen Gresik’s history that we have managed to produce 700,000t of cement per month on average last year, from 640,000t in the previous years. Our success has also been followed by our subsidiary PT Semen Padang, which managed to recover its operation after the revolt in 2001. We are on the right track now.  

There is also an accusation that you are behind the labor union in rejecting the government’s dispute settlement. Is that true?  I am not an agent for Cemex. There are a lot of rumors going around. I have also been accused of receiving bribes from Cemex for defending their interest in Semen Gresik. That is not true. I have repeatedly said that I am in the middle (of the dispute) and a professional.  

Other cement companies are now consolidating their operations, but Semen Gresik remains stuck in this dispute. How damaging is it?   Other cement companies are actually facing different problems. They are not consolidating. Their problems are more complicated than ours, mostly related to changes in working culture, from local to international culture. This is a more deep rooted problem.